Nvidia Warns New AI Law Could Harm Global Tech Innovation

Post by : Monika

Photo: Reuters

On September 5, 2025, Nvidia expressed serious concerns about the proposed Guaranteeing Access and Innovation for National Artificial Intelligence (GAIN AI) Act. The company argues that the legislation could restrict global competition in advanced chip markets and potentially harm the U.S.'s leadership in technology. Nvidia likened the potential effects of the GAIN AI Act to the earlier AI Diffusion Rule, which imposed limits on the computing power available to other countries.

Key Provisions of the GAIN AI Act

• The GAIN AI Act, introduced as part of the National Defense Authorization Act, includes several significant measures:
• Prioritization of Domestic Orders: AI chipmakers would be required to prioritize U.S. orders for advanced processors before fulfilling international requests.
• Export Licensing Requirements: The act mandates that exporters obtain licenses and approval for shipments of silicon exceeding certain performance thresholds.
• Performance-Based Restrictions: Specifically, chips with a total processing power of 4,800 or above would face export restrictions unless U.S. entities are unable to acquire them.

Nvidia's Response

Nvidia's spokesperson emphasized that the company has never deprived American customers to serve international markets. They argued that the proposed bill addresses a problem that doesn't exist and could unnecessarily restrict global competition in industries reliant on advanced computing chips.

Comparison to the AI Diffusion Rule

The GAIN AI Act shares similarities with the AI Diffusion Rule, which was implemented during the previous administration. Both policies aim to ensure that the U.S. maintains access to advanced AI technologies while limiting other countries, particularly China, from acquiring high-performance chips. The AI Diffusion Rule allocated specific levels of computing power to allied nations and imposed restrictions on others.

• Implications for the Tech Industry
• If enacted, the GAIN AI Act could have several implications:

Impact on Global Competition: By prioritizing domestic orders and imposing export restrictions, the act could limit the availability of advanced chips in international markets, potentially stifling innovation and competition.

Effects on U.S. Technological Leadership: While the act aims to secure domestic access to advanced technologies, it may inadvertently hinder the global competitiveness of U.S. tech companies by reducing their market reach.

Influence on International Trade Relations: The legislation could strain trade relations between the U.S. and other countries, particularly those affected by the export restrictions.

Nvidia's concerns highlight the delicate balance between national security interests and the need for global collaboration in technological advancement. As the GAIN AI Act progresses through the legislative process, its potential impact on global competition and innovation remains a critical point of discussion within the tech industry.

GAIN AI Act